What to know about rare earths in the China-U.S. trade dispute
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China's export restrictions on rare earths are backing up U.S. supply chains and threatening defense infrastructure.
Why it matters: China dominates the global production of the minerals key to advanced technologies.
Driving the news: Since April, China imposed export restrictions on seven kinds of rare earth metals and magnets used in defense, energy and automotive sectors, according to the Center for Strategic and International Studies.
- The suspensions, which apply to samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, were a response to Trump's tariff increases on Chinese products.
Threat level: U.S. manufacturers have warned about severe supply chain shortages as a result of the trade disruptions.
- Trump in April called for an investigation into national security risks posed by U.S. reliance on imported processed critical minerals, including rare earth elements.
- The Trump administration's threat to cancel the visas of Chinese students in the U.S. came as a response to realizing that China was withholding the minerals and magnets as a tariff negotiating tool.
Flashback: Last year, China banned the export of three rare minerals — gallium, germanium and antimony — to the U.S. after the Biden administration announced curbs on the Chinese chip industry.
- Gallium and germanium are used to make computer chips, cars and solar panels.
- Antimony is used in the production of flame retardants, lead-acid batteries, night vision goggles and even nuclear weapons.
Zoom out: There are 17 rare earth elements, according to the Science History Institute. They have unusual fluorescent, conductive and magnetic properties, and they're hard to separate chemically.
- "The development of China's rare earth elements industry is closely connected to China's reentry into global trade after 1978 and its government's successful efforts to make the country a global manufacturing power," per the Institute.
By the numbers: China mines about 70% of the world's rare earths, per the New York Times, with Myanmar, Australia and the U.S. mining the rest.
- China is also responsible for chemical processing for 90% of the world's rare earths.
- The Pentagon has spent more than $439 million to establish a domestic rare earth element supply chain since 2020, but so far the U.S. production is still at its early stage, according to CSIS.
Between the lines: Rare earth minerals are also critical to the war in Ukraine, which sits on significant reserves. The U.S. wants access.
- U.S. Treasury secretary Scott Bessent requested 50% ownership of Ukraine's rare earths in exchange for U.S. investment in Ukraine. Ukraine rejected the offer.
The intrigue: China's export suspensions have driven a surge in investor interests and startups offering rare earth mineral innovations.
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